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Thursday, July 30, 2009

Precious metals turn paler

Gold and silver drop as dollar continues to gain

Precious metal prices fell on Wednesday, 29 July, 2009. The strong dollar was mainly responsible for this.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $927.2, lower by $11.9 (1.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.6%. Year to date, gold prices are higher by 4.7%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11.5%) since then.

On Wednesday, Comex silver futures for September delivery lost 48 cents (3.5%) at $13.26 an ounce. Last week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 18.2% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose by more than 0.7%. The euro fell by more than 1% against the dollar.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 90 (0.6%) at Rs 14,651 per 10 grams. Prices rose to a high of Rs 14,750 per 10 grams and fell to a low of Rs 14,618 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 517 (2.3%) lower at Rs 21,879/Kg. Prices opened at Rs 22,336/kg and fell to a low of Rs 21,758/Kg during the day's trading.

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